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Over Two Decades Of Holding Insurance Companies Accountable

Bad Faith Insurance Archives

Lifetime Disability Benefits

Some insurance companies offer lifetime disability benefits.  They usually come at an additional fee (or premium) and are attached to the policy as an "endorsement" or "rider" to the policy.  But not all lifetime coverage is created equal.  Some policies - usually those that were issued in the 1980's or 1990's - merely continue your benefits for life without any restrictions or limitations.  Benefits under these policies can even increase over time pursuant to a Cost of Living Adjustment (COLA) provision.  These policies offer the broadest possible coverage.  Other policies are not so generous.  Their coverage may be contingent on when you become disabled or the type of disability that you are suffering from.  For instance, some policies provide reduced benefits if you are disabled after age 60.  Others provide for reduced benefits if you are disabled as a result of a sickness rather than an injury.  The point: it pays to read your policy and know your rights.   

Punitive Damages Anyone? - Nickerson v. Stonebridge

Earlier this year, the Supreme Court provided additional guidance on punitive damage awards in insurance bad faith actions.  The decision, Thomas Nickerson v. Stonebridge Life Insurance Company (June 9, 2016) 63 Cal.4th 363, held that the ratio of punitive damages must include an award of Brandt attorneys' fees in its calculation.  Nickerson involved a denial of medical benefits under an indemnity policy.  The insured was a paraplegic who broke his leg when he fell from his wheel chair.  He was hospitalized for a total of 109 days, but his insurer only paid benefits for 18 days, and denied coverage for the remainder without speaking with his doctors.  The insured filed suit.  At trial, he was awarded an additional $31,500 in benefits, $35,000 in emotional distress damages, and $19 million in punitive damages.  The parties also stipulated to an award of Brandt attorneys' fees in the amount of $12,500.  The trial court then reduced the punitive damages award from $19 million to $350,000, reflecting a single digit ratio based on the $35,000 emotional distress award only, citing State Farm Mutual Automobile Ins. Co. v. Campbell (2003) 538 U.S. 408.  The Supreme Court disagreed with the calculation.  It held that the Brandt fee award must also be taken into account when calculating punitive damages because it is an item of compensatory damage. 

All disability policies are not created equal

Most of us are covered by disability policies through our employers.  Premiums are paid by payroll deductions and coverage is described in a summary plan description.  Those policies (subject to a few exceptions discussed below), are governed by federal law, specifically, the Employee Retirement Income Security Act of 1974 ("ERISA").  These laws provide strict requirements for appealing a claim denial, as well as limited remedies for those whose disability benefits are wrongfully cutoff by their insurance carrier.  No matter how misguided an insurer's decision is, the only remedy for insureds under ERISA is (1) the payment of past disability benefits owed by the carrier and (2) the possible recovery of attorneys' fees.  In most circumstances, nothing else is recoverable. 

Stars Get Shafted By Insurance Companies Too

From Bruce Springsteen's legendary voice to Taylor's Swift's legendary legs, when it comes to insuring their most valuable "assets," it seems that celebrities are as cautious as the rest of us.  The most recent example of a superstar looking for protection against unforeseen maladies is world famous soccer player Christiano Ronaldo.   It's been reported that Mr. Ronaldo just purchased an insurance policy covering his cleat bearing, goal scoring legs for an astonishing $144 million.

Do I Have to Submit an Appeal to the Insurer that Denied my Claim?

You did everything right: you promptly submitted your claim to the insurance company, dutifully documented the facts surrounding your claim, obtained supporting evidence, completed all the insurance company's forms, and were always responsive to the insurer's claim handlers.  Yet you just received a letter from the insurer notifying you that your claim is denied.  That letter probably contains a notice that you "may" appeal the denial by submitting an appeal to the insurer.  But why should you go to the effort of preparing an appeal to a company that's already indicated a bias toward your claim?  It seems counterintuitive.  Besides, the insurance company says you "may" appeal, doesn't that mean it's not mandatory?

Insurance claims tied to California wildfires present challenges to homeowners

If you were to ask someone to name the biggest meteorological threat California faces, years ago they would likely have replied, "Earthquakes". However, in recent years, the two threats that top the list are the related issues of drought and wildfire.

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